Six cruise passengers rock some big boats

August 04, 1996|By Christopher Reynolds | Christopher Reynolds,LOS ANGELES TIMES

It was April 19, as the U.S. cruise industry was laying plans to reposition its ships for the summer season, when a New York law firm and six passengers decided to rock some boats.

In a batch of lawsuits against seven major cruise companies, the passengers challenged the industrywide practice of tacking "port charges" onto passenger bills. Most passengers may think those fees go directly to paying government levies, but in fact, the lawsuits alleged, most of that money is actually "profit that ends up on the bottom line."

The plaintiffs, two New Yorkers, two Floridians and two Californians, called for a refund of every dollar "overcharged" through the last four years and are seeking to have the suits accorded class-action status. Plaintiffs' attorney Joseph Lipofsky, of New York-based Zwerling, Schachter, Zwerling & Koppell, estimated that the "overcharge" could reach $600 million.

Cruise lines immediately denied the allegation. It is true that port charges are usually listed separately from the "all-inclusive" base price of a cruise, they noted, but passengers are informed of hTC them in writing and well in advance. Several cruise line representatives added that "it's the way we've always done it," and said that providing passengers with a breakdown of the various expenses involved would be impractically complicated.

Three months later: Have the legal actions in Florida, California .. and Washington won any victories for cruise customers? Have they prompted any changes in practice among cruise lines? Have they revealed exactly what expenses are reflected in port charges?

Not so far, not at all and not quite. But consumers can still profit from the hubbub.

Port charges, a tradition on passenger ships, usually range from $65 to $250, depending on the ship, the ports of call (Alaska and Europe tend to be more costly than Mexico and the Caribbean) and the length of the itinerary. Sometimes, two companies will cruise the same itinerary and set port charges that differ by more than 10 percent. And on the shortest, least costly cruises, such as Carnival's three-day Los Angeles-Ensenada-Los Angeles cruises, the port charges of $84.50 (including customs fees and international departure taxes) boost the total cost by more than 35 percent beyond the discounted base price of $249 per person.

Cruise company officials say that not only government fees but also pilot and tugboat services, stevedoring and garbage hauling are among the costs than can be reflected in the charges. But this dispute springs from the mystery of exactly what expenses the cruise lines are building into their port charges.

At Princess Cruise Line, a new 1997 catalog describing cruise-and-land-tour trips to Alaska uses the phrase "port charges/government fees/hotel fees." But, said spokeswoman Julie Benson, "We do not specify what they include."

Similarly, said general counsel Dan Grausz at Holland America Cruise Line: "We don't disclose that information." He asserted that cruise lines keep mum on such details because full disclosure would mean revealing various transactions with contractors, and would put a company at a competitive disadvantage.

"There are a lot of costs incurred when you're in port," Grausz continued. "There's no deception going on here." He decried the lawsuit as a case of "lawyers trying to get rich."

On the plaintiffs' side, Lipofsky asserted that only about half the cruise lines' port charges are actually passed-along assessments from government agencies.

Lipofsky said the plaintiffs have sought internal company communications on how port charges are set -- information that could be illuminating for consumer advocates no matter how the case turns out.

Pub Date: 8/04/96

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